General Atlantic and Coatue Management led a $1.4 billion investment in Sierra Space, valuing the Sierra Nevada Corp. subsidiary at $4.5 billion, its CEO said in an interview.
The Louisville, Colorado-based company will spend proceeds from the funding round on advancing plans for affordable space transportation as well as habitation and manufacturing in orbit, Sierra Space Chief Executive Officer Tom Vice said in an interview. Other new investors include Moore Strategic Ventures, BlackRock Private Equity Partners and AE Industrial Partners, he said. Family offices associated with billionaires Stan Druckenmiller and Vincent Viola also participated in the funding round, people with knowledge of the matter said.
“We see a number of businesses today here on Earth looking to invest massive amounts of capital and scale businesses in space,” said Vice.
Sierra Space’s planned space station, Orbital Reef, is a joint project with Jeff Bezos’s Blue Origin and may be operational by 2027. Companies seeking zero-gravity or microgravity environments for pharmaceutical research, 3D-printed human organs, or work in fiber-optics, energy and semiconductors, have expressed interest in station, Vice said.
Sierra Space is on track to deliver approximately $400 million in revenue in 2021, thanks in part to a contract with NASA, Vice said. The space station is set to feature docking ports for its Dream Chaser space planes and include its Large Integrated Flexible Environment habitats — flexible modules that can expand to the size of a three-story building in orbit. Sierra Space is set to launch a Dream Chaser plane to resupply the International Space Station in late 2022, Vice said.
“Space is a capital-intensive business and we see something special here,” said General Atlantic Chairman and CEO Bill Ford, whose firm, like Coatue, invested $400 million as part of the funding round. “We’re very excited about the opportunity to commercialize the low-Earth orbit,” said Ford, who said he’s known Sierra Nevada’s owners Eren and Fatih Ozmen for over a decade.
The company has the strategy and resources to “lead the new space race,” Fatih Ozmen said in an emailed statement. Both he and Eren Ozmen will serve on the Sierra Space board, as will Ford and Coatue’s Philippe Laffont.
Blue Origin and Elon Musk’s SpaceX are among firms that have helped drive down the cost of launches, Ford said. Morgan Stanley estimates the space economy, valued at roughly $350 billion, is set to grow to more than $1 trillion by 2040. General Atlantic’s research has led it to expect commercial launches to proliferate steeply from a pace of 114 launch attempts in 2020, or two per week.
Other space-related companies including Astra Space Inc., Redwire Corp., Momentus Inc. and Rocket Lab USA Inc. have made public debuts after merging with a SPAC. Virgin Orbit, Planet Labs and Satellogic have also announced plans to merge with blank-check firms. Sierra Space may explore a public listing within the next 18 months, a person with knowledge of the matter said.